The Wnt signal transduction pathway directs fundamental cellular processes during development and tissue homeostasis. Deregulation of Wnt signaling results in numerous developmental defects and triggers 90% of colorectal cancers, the vast majority of which result from inactivation of the tumor suppressor, Adenomatous polyposis coli (APC). Although we have known for more than two decades that APC plays a central role in Wnt signaling, the mechanistic basis underlying APC function has remained elusive. Our long-term goal is to understand the mechanisms by which APC regulates Wnt signaling, as this knowledge is critical for devising new strategies that target Wnt-driven diseases. APC and its binding partner, Axin, establish a multiprotein ?destruction complex? that inhibits Wnt signaling by promoting turnover of the transcriptional coactivator, beta- catenin, the key mediator of Wnt pathway activation. Axin plays key roles not only in the destruction complex, but also in assembly of the ?signalosome?, a complex that activates signaling following Wnt stimulation. In the prevailing model for Wnt signaling, the role of APC is limited to promoting beta-catenin degradation and, thus, pathway inhibition in the unstimulated state. However, our unexpected findings in the current funding period force revision of this model, as we have discovered completely novel aspects of APC function. Our new findings indicate that the primary role of APC is to control both of Axin's essential roles: to inhibit signaling in the unstimulated state, and to activate signaling following Wnt stimulation. We found that APC regulates two post-translational modifications critical for Axin function in both the inhibition and the activation of Wnt signaling. In the forthcoming funding period, we propose to elucidate the novel mechanisms by which APC regulates Axin, and thereby controls assembly of both the destruction complex and the signalosome. We have developed innovative experimental systems for in vivo Wnt pathway dissection in Drosophila and cultured mammalian cells as well as in vitro pathway reconstitution with Xenopus egg extracts and purified proteins. We propose to combine our unique genetic and biochemical approaches to interrogate the functions of APC in Wnt pathway regulation. The knowledge gained from these studies on the fundamental mechanisms that underlie APC function will be invaluable in the development of future treatments for Wnt-driven diseases.